Law guide: Employment

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Can the employee bring unfair dismissal claim?

Can the employee bring unfair dismissal claim?

Contents

Can the employee bring a claim?

Generally an employee must have the necessary continuous service before they can bring a claim for unfair dismissal. Employees who have 2 years' continuous service (or 1 year's continuous service for employees in Northern Ireland) will be entitled to pursue a claim for unfair dismissal. The exception to that general rule is if their claim relates to one of the following:

  • Being dismissed because of political opinions or affiliations
  • Being discriminated on the grounds of age, disability, gender reassignment, marriage or civil partnership, pregnancy or maternity, race, sex, sexual orientation and/or religion or belief (England, Wales and Scotland) or religious belief or political opinion (Northern Ireland)
  • Being dismissed for or suffering a detriment because they are pregnant and all reasons relating to maternity leave
  • Being dismissed or suffering a detriment for taking or seeking to take time off for parental leave, paternity leave (births and adoption), adoption leave or time off for dependants
  • Being dismissed or suffering a detriment for acting as an employee representative at grievance/disciplinary and dismissal hearings and/or appeals
  • Being dismissed or suffering a detriment for being a member of a trade union or participating in legitimate trade union activities
  • Being dismissed or suffering a detriment for exercising, or seeking to exercise the right to take time off for jury service (or some other public duty), antenatal care, to accompany a pregnant woman to an antenatal appointment or looking for work or arranging training prior to being made redundant
  • Being dismissed or suffering a detriment for making a protected disclosure that is in the public interest (generally known as 'whistleblowing')
  • Being dismissed or suffering a detriment for any of six circumstances relating to health and safety specified in the EC Health & Safety Directive 89/391 (such as whistleblowing on health and safety breaches)
  • Being dismissed or suffering a detriment for exercising, or seeking to exercise, rights under the Working Time Regulations – including rest periods, breaks and annual leave
  • Being dismissed or suffering a detriment for exercising, or seeking to exercise, rights under National Minimum Wage regulations
  • Being dismissed or suffering a detriment for claiming a statutory right
  • Being dismissed or suffering a detriment for exercising, or seeking to exercise, rights under part-time or fixed-term employee regulation
  • Being dismissed or suffering a detriment for refusing to work on Sundays – certain shop/betting workers only
  • Being dismissed or suffering a detriment for being a trustee of an occupational scheme
  • Being dismissed or suffering a detriment for failing to disclose a spent conviction
  • Being dismissed or suffering a detriment for claiming repayment following an unlawful deduction from wages
  • Being dismissed or suffering a detriment for requesting an itemised pay statement or written terms and conditions of employment or written statement of reasons for dismissal
  • Being dismissed or suffering a detriment for exercising, or seeking to exercise, a right to apply for flexible working arrangements – this is subject to the employee having been in continuous employment for at least 26 weeks prior to making or seeking to make such an application

Claiming damages for breach of the terms of an employment contract

Excluded groups

The right to claim unfair dismissal does not apply to certain excluded groups. An employee is barred from bringing a claim if he/she:

  • Has not been continuously employed for the required period at the effective date of termination (see below)
  • Is a share fisherman or merchant seaman
  • Is a member of the police or armed forces
  • Is genuinely self-employed (Please note, though, that tribunals have found some apparently 'self-employed' persons to be employees/workers. Whether a person is self-employed or not is a question of fact in all the circumstances. Tribunals are reluctant to allow the parties to put a self-employed 'label' on the relationship to avoid tax liabilities and/or employment rights.)
  • Is working under an illegal contract

If an employee is dismissed in breach of their contractual notice period, they may claim damages amounting to the wages the employee would have earned during the notice period.

Effective date of termination

The effective date of termination means that:

  • Where the contract is terminated by notice (including where the employee is given notice but is not required to work their notice period, usually referred to as 'garden leave'), whether notice is given by you or by your employee - the date on which that notice expires
  • Where the contract is terminated without notice (including where a payment in lieu of notice is paid) - the date on which termination takes effect
  • If there is a fixed-term contract that expires without renewal - the date on which the term expires

Usually there is no difficulty in calculating the effective date of termination and, in most cases, it is the last day on which your employee worked for you.

If you dismiss an employee without notice, but still pay them their wages for the notice period (called payment in lieu of notice), the effective date of termination is still the date your employee was told to go. In the case of constructive dismissal, the effective date of termination is the date of your employee's departure.

In certain circumstances, the effective date of termination can be extended. The purpose of this rule is to ensure that an employee is not deprived of their statutory rights by wrongfully dismissing them without notice just before they reach the qualifying period to present a claim.

A typical example of an extension of the effective date of termination is where an employee is employed continuously in England, Wales or Scotland for more than one month but less than two years, and is then wrongfully dismissed without notice a couple of days before completion of their two-year period of employment. The employee would be entitled to one week's statutory minimum notice.

In this particular case the effective date of termination can be extended by one week which gives the employee the necessary two years' continuous employment to present an unfair dismissal claim to an employment tribunal.

An extension of the effective date of termination can similarly be utilised to ensure that an employee will have the necessary two years' continuous service to claim a statutory redundancy payment.

Continuity of employment

The period of employment must be continuous. If the employment period is broken so that it is not continuous with a later period, a new period of employment will commence after the break, starting again at week one. The old period cannot be added to the new.

Weeks during which an employee is not employed under a contract of employment do not count as part of their continuous employment, except in the following circumstances:

  • If absence is due to sickness, injury, pregnancy or confinement up to a maximum of 26 weeks
  • If there is a temporary stoppage of work
  • If the employee is absent in circumstances where, by arrangement or custom, the employee is regarded as continuously in employment

If there is a contract of employment, the question of continuity of employment is not an issue as there is a continuing contract and continuity of employment will be preserved, even though the employee may not work as a result of sickness or holiday.

Industrial action does not break continuity of employment, but days during which an employee may be on strike or locked out by the employer do not count in computing the length of employment.

If an employee is made redundant and is due to start another job (under a new employment contract) with the same employer then continuity of employment will be preserved so long as they start their new job within four weeks of the effective date of termination of their previous employment contract.

Change of employer

For employment to be continuous, the employee must be with the same employer. If there is a change in employer, continuity will be broken in most cases. Although a change of employer breaks continuity, a change in job with the same employer will not break it.

There are circumstances, however, where continuity of employment will be preserved despite a change of employer. For example, where an employer has died, his or her personal representatives (e.g. executors) will take control of the deceased employer's estate including the business. If the personal representatives agree to continue to employ the employee then continuity of employment is preserved. Another example would be where there is a change of partners; again there is no break in continuity.

Constructive dismissal

An employee who resigns (and has the required continuity of service) can still bring a claim for unfair dismissal and be awarded compensation if they can show that they were 'constructively dismissed', i.e. that the employer's conduct fundamentally breached their contract of employment. This includes breaching the implied duty of trust and confidence. You must therefore treat all employees fairly and consistently. Examples of actions that could amount to constructive dismissal include if you were to:

  • Reduce an employee's pay without his/her agreement
  • Lower an employee's status or change any of his/her conditions of employment without his/her agreement or the proper procedure
  • Treat an employee in a discriminatory manner
  • Consistently undermine an employee's authority
  • Deny an employee any of his/her rights under his/her contract of employment
  • Be deliberately unfair to an employee in any way
  • Attempt to influence an employee to resign
  • Allow an employee to be harassed or victimised by other employees or members of the public whilst at work

Please note that the above list is not intended to be exhaustive, merely to illustrate those areas where a problem may arise.